The trade agreement between the EU and Mercosur states could be advantageous for both sides, eliminating high import tariffs. However, the ratification of the document is at risk.
After nearly 20 years of negotiation, the European Union and Mercosur states — Brazil, Argentina, Uruguay, and Paraguay — reached a political agreement in June. This “agreement in principle” aims to foster growth and job opportunities on both sides. However, ratification remains uncertain, as several nations have expressed reluctance to sign the deal.
The EU is Mercosur’s largest trade and investment partner, exporting €45 billion in goods in 2018 and €23 billion in services in 2017. Additionally, the EU holds a €381 billion foreign investment stock in Mercosur. For the EU, eliminating trade barriers, particularly for smaller companies, is a key objective. The agreement could remove tariffs on 91% of EU products, saving up to €4 billion annually. For instance:
Despite its benefits, the agreement faces significant resistance:
Given these obstacles, the future of the EU-Mercosur agreement remains uncertain.